CEP Magazine – May 2022

In January, the US Federal Trade Commission (FTC) released two new guides on marketing issues related to the use of customer reviews.^[1] Put that area of ​​risk in the ever-growing bucket of things compliance probably needs to consider.

Guides are just that: advice. The law itself doesn’t go to that level of detail when it comes to false or misleading marketing and advertising (although it approximates the Consumer Review Fairness Act of 2017).^[2] But they go into a lot more detail than I would have thought, giving insight into practices the FTC might challenge and checks it would want companies to have. And for readers working in an area outside the scope of the FTC, the guides might be helpful in assessing what the company should or shouldn’t do when it comes to protecting its reputation.

False review. Manipulated rankings. Excluding negative reviews. Display reviews in a misleading manner. Do not disclose financial relationships with customers who post positive reviews. Writing reviews.^[3] Which of these could be considered illegal and/or simply unethical? Does it matter?

The list of potential problems is long. And outsourcing the client assessment function to a third party does not absolve your business of this risk. The FTC is on it. Everyone knows how third parties can create risks for us.

But my point here isn’t necessarily about the FTC and marketing compliance, although that’s pretty important. My general point is about the growing list of areas that present new or changing compliance risks. And many of these areas have a real compliance risk component, but also an ethical and environmental, social and governance component. Even though some of these practices are technically legal, do we want to engage in them?

Compliance risk assessment has become much more complicated over the years. Although it was never a good idea to do so, taking an annual checklist approach to performing the assessment, considering the exact same finite list of compliance risks, has never been a worse idea. It is essential to consider the underlying drivers and forces that create the risk. Taking a proactive approach to knowing what our different business units are doing has never been more important.

1 Federal Trade Commission, Featuring Customer Reviews Online: A Guide for Platforms, January 2022, https://www.ftc.gov/system/files/documents/plain-language/1006a_featuring-online-customer-reviews-508_0.pdf; Federal Trade Commission, Solicit and Pay for Reviews Online: A Guide for MarketersJanuary 2022, https://www.ftc.gov/system/files/documents/plain-language/1007a_soliciting-and-paying-for-online-reviews-508_0.pdf.
2 15 USC § 45b.
3 “Endorsements, Influencers, and Reviews,” Federal Trade Commission, accessed March 4, 2022, https://www.ftc.gov/tips-advice/business-center/advertising-and-marketing/endorsements%2C-influencers%2C -and-criticisms.

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